Performance Mortgage

When buying Sub2, ever have use a performance Mortgage, at sellers insistence, so if default occurs they have recourse and get property deeded back to them?

Howdy Paul:

Depending on the seller most will not even want to cure the default or will not be able to do so especially if they are ondefault when you find the deal or have little or no equity.

Also depending on what state you are in there are or were other names for similar instruments. A deed of trust to secure assumption used here in Texas when the buyer assumes the loan and gives the seller the rigt to step in and cure the default.

It could still be hard for the seller to actually get the deed unless they foreclose or get the buyer to transfer the deed willingly. It can get messy and costly to take back a property and usually involves a lawyer and several thousand in legal fees.

Your seller sounds pretty smart and wants to cover all the bases. Lets hope it all goes smooth and you do not default.